Q1 2020 Earnings Call
[music].
Excuse me, ladies and gentlemen, this is the operator today's conference is scheduled to begin momentarily.
Hi, Mike what can be placed a musical thank you for your patience.
[music].
Today's call is supposed to buy Louis clinic, President and Chief Executive Officer, and Newton, Jane Chief Financial Officer, and Chief Investment Officer, a Fianna Senior living Inc.
Please be aware, there's certain statements or information discussed today are forward looking and actual results could differ materially.
The company does not undertake to update any forward looking statement or information.
Please refer to the forward looking information and risk factor section and the company's public filings, including his most recent M.D. and they had a <unk> for more information.
He will also find a more fulsome discussion of the company's results and its mdna and financial statements for the period, which are posted on SEDAR and can be found on the company's website.
Santa living that C.
Today's call is being recorded <unk> replay will be available.
Destruction for access into call I posted on the company's website.
And the details I'll provide and the company's news release.
The company posted slides, which accompanies the host remarks on the company website under events and presentations.
With that I'll now turn the call over to Miss core ma'am.
Please go ahead Miss clinic.
Thank you then data.
Good morning, everyone and thank you for joining us on our Q1 call. This morning.
We are hosting the call as we continue to battle the fight against coal, but 19.
Here in Canada and around the globe the senior living residences.
But have been the epicenter of this crisis.
Yes, or no no I give you an update on our operating and financial results I want to provide you with some insight into how we have been managing amid the crisis.
First and foremost I would like to express my deepest gratitude to our team members.
Yeah that our teams demonstration of resilient.
Passion and commitment had said nothing short of her role it.
I've been humbled by their dedication to residents.
Each other and there was all been fighting Carbonite King.
They're making a remarkable difference in people's lives each and every day in the midst of this crisis.
They are an inspiration to all bye.
We are deeply saddened by the tragic loss of life of resin.
The two volume teen numbers.
I want to express my deepest condolences to their family.
<unk> team members.
Grieving, while continuing to work and manage an extraordinarily difficult situation as a result of this pandemic.
The management, a coal, but night team and the health and safety of residents and team members is currently our singular focus.
Since the onset of the pad down like we have been collaborating with sector Association.
Central government.
Okay. So already.
System partners.
Like Dentek fight sector needs and help to shape important policies and protocols to manage the situation.
We have an internal incident management team, which is directing the prompt a comprehensive implementation Oh prevention of measures and provincially mandated directives across the company.
Since the start of Q1, we have being pulled our due diligence in addressing extensive infection prevention and other precautionary measures aimed at limiting the spread of the virus.
To date, we encouraged but we have no confirmed coal, but 19 cases and any of our residences in British Columbia.
In Ontario, we have four locations that are now cleared up outbreak data.
And a number of residents and team members, who previously were kobin parts of the have now been resolved.
We are encouraged to see more cases resolving every day.
We also welcome the expanded testing all residents and team members in Ontario, and we are encouraged that the majority of these test result are now coming back negative.
Despite the many precautions that's safe guards, we currently have 13, Ontario long term care homes.
And for retirement residences as wallet, one managed home with active cases of corporate 19.
Over 83 owned and managed residences.
In some cases, there have been very limited spread of the virus to a very few cases in either residents are style.
Unfortunately, a few up our long term care residences in Ontario had been very severely affected.
This is Ben extraordinarily challenging for Radnet their family and our team members.
Were very thankful for the support from the hospital the Canadian Armed forces local health network, we're providing assistance expertise.
Everyone is working extremely hard the common goal of fighting Cobot 19.
Personal protective equipment has been experiencing global supply chain disruption.
To ensure that we would have access to P. P. E C N a joint other senior living operators of the founding member of Kate.
As the Canadian alliance to protect and equip senior living.
This initiative is designed to ensure that all senior living providers across the country would have access to P. P E amidst the global supply chain disruption.
Sure Okay.
Yeah that commit to over fund our P.E. requirement by 35% to allow for reserve of supply that can be made available I car to small and not for profit Canadian operators.
To date KCG had six stuff, we carried over 20 million pieces pp.
Yeah, No has had adequate ppt to date at all of our residents and for use in accordance with prevention directive.
We have source nearly 3.7 million pieces of P.P. to date for Seattle views.
And one thing well, so government who have prioritized the need.
Senior living sector to access P. P.
With respect to stopping.
Senior living sector was experiencing stopping shortages and challenging prior to the pandemic.
That's has been further exacerbated by coal bed 19.
Peculiar late winter weather has a positive coal, but 19 case.
He dolphin shortages occur because team members can no longer move between multiple sites.
They are unable to work because they have tested or are some stuff. It's called the 19 positive.
Or they may decline work or self isolate for various other reasons.
We're doing everything that we possibly can to recruit and can deploy style.
And to expedite the hiring process.
All supporting the single work site.
Since the start of this pandemic Yep offered part time workers to go full pipeline and 900 part time personal support work or a nursing staff have selected to work full point with yeah.
In addition, we have hired many new team members to care for residents.
Whereas thankful for that support of the registered nurses Association of Ontario, who have been supplying newstar thrust to higher.
A temporary pandemic pay for frontline workers by the government sub Ontario, and British Columbia, It's helpful. In recognizing the essential and heroic work a bar style and other frontline workers.
Inspired by the dedication an extraordinary effort of stuff in the senior living sector.
Earlier this week, we participated in the launch of carriers.
As a founding member.
And then this initiative is mobilize together with three of our sector peers.
Senior living care spawn will provide emergency financial assistance.
Sectoral employees were facing extraordinary circumstances amidst the crisis.
And with that we will build a legacy for future investment in employee education.
The cares fund aims to provide onetime financial grant of up to $10000 to eligible employees of long term care and retirement operators in Canada.
Founding members of the cares fund have collectively committed an initial amount of 2 million to this initiative.
In addition to see another 500000 dollar contribution our board of Directors has contributed approximately 20% of their annual cash compensation for the remainder of the year.
We are grateful for the provincial government support in funding the extraordinary costs associated with the extensive infection prevention safeguard measures.
As well as single work sites for team members.
All of which helped to limit the spread of the virus.
To date, the government up, Ontario has announced 243 million in emergency funding for the sector.
As well as 20 million in funding for the retirement residences, which will fund incremental cope with 19 call.
The government a b C has committed funding for assisted living and long term care to support single work site locations.
This is an extraordinarily difficult time for Brazil, and families who have not been able to visit for many weeks now and our team members are doing everything they possibly can to keep breadwinner connected to their loved ones.
Often in very creative ways.
Finally in meaningful communication is so important and we want all of our stakeholders to have the facts.
This can be difficult given the rapidly changing circumstances.
And the increased media attention.
As well as the intensity of the current reality that requires our team members to focus on providing essential Karen surfaces to residents.
Providing quality and care.
Good.
Sorry, providing quality Karen services to our resident in our mission.
We're extremely proud to have recently been awarded a three year accreditation.
The commission on accreditation of rehab facility.
For the long term care portfolio in Ontario.
With a 99.5%.
Form it could be accreditation standards.
That's that's a reflection of the and innovative programs best practices and commitment to residents centered care.
It is the highest level of accreditation and as a testament to the incredible work that our team doing every day.
Niton will now provide an update on our operating and financial performance.
Thank you Lois and good morning, everyone.
Before I discuss our Q1 could actually results I would like to express my gratitude to our incredible team getting that's very difficult time.
Yeah, and <unk> commitment to providing secure them services did resident is truly amazing.
Turning to our key operating metrics average occupancy and I'm often get portfolio remained high at 97.9% into 1020.
Average same property occupancy and then apartment portfolio was 85.1% in the quarter a decrease of 1% from the fourth quarter of 2019, largely due to fewer tours and residents moving in.
One of the oversupply in the number local markets.
Same property NOI for the quarter was 36.4 million compared to 38.9 million in Q1 2019, a decline of 6.4% largely as a result of softer occupancy another carbon segment.
During the quarter to quarter, when 9 million of expenses to support the cost of managing corporate banking and point $8 million and then it's going to government funding revenues.
The long term care division generated same property NOI of 20.6 million compared to 21 billion into part of your mostly due to timing of expenses.
Long term care residence inns represent 56% of Seattle portfolio, and you will continue to see from funding for vacancies caused by equity for the commissions due to an outbreak including corporate Nike.
As a reminder, government funding for direct care and rather than programs in Ontario is useful resident purposes, only and operators do not make any income from these.
The retirement division generated same property NOI or 15.9 million compared to 17.9 million in Q1 2019, largely the result of more occupancy due to fewer tours and residents moving and as one of oversupply and number four markets.
This was partially offset by fewer mobiles than usual and some conversions from temporary to permanent state towards the end of the quarter.
At the time, maybe at least I get underdog from February you expected mid single digit decline of retirement same property NOI for the first top of the C or.
As a result over 19 million, putting additional cost advantage fares and experienced a decline in moving activity.
Also in preparation for the hospitals storage capacity program, you did not make significant adjustments to staffing in accordance with occupancy.
Factors that resulted on same property NOI declined by 11% in Q1.
For the month of April average same property, we talked in occupancy was 82.7%.
Congrats collections from residents remain consistent with previous collection levels.
Well if Apple in Q1, 2020 was 24.4 million compared to 21 can see million into probably you're an increase of 14.5% largely driven by Georgia and expenses the mark to market adjustments on share based compensation.
So what cash taxes indoor net interest expense, partially offset by lower in Hawaii.
You want 2020, well for sure was 36.5 cents compared to 32.2 cents into criteria.
In the quarter, if it was 25.6 million compared to 23.4 million deprived here and if AFFO per share what's pretty good when two cents in Q1 compared to 35.2 cents on the part of your.
Yeah that has the financial flexibility and liquidity to help instead of the current situation.
The quarter the company entered into a credit agreement for 200 million dollar senior unsecured revolving credit facility for a five year term.
You have also increase our unencumbered asset pool to approximately 540 million as at March 31st Southern 20, 300 million at the end up 2019.
Our liquidity was 222 million abandon the quarter comprised of cash and cash equivalents and available credit lines.
To preserve liquidity you'd also taking advantage of the different programs being able to various tax payments workers' compensation premium and property tax payments as one of the based reductions in energy costs.
As of April Thirtyth, 2020, odd liquidity increased slightly to 225 million.
But that there were quite got profile. They believed that the we've continued to have access to multiple sources of financing and good limited debt repayments and maturity for the remainder of 2020.
We also believe that'd be we'll be able to successfully refinance I see the speed debentures coming due next year based on current financial position.
Capitalization exotic distributer between unsecured and secured debentures credit facilities conventional mortgages and see him at sea insured mortgages.
Turning to a balance sheets and capital structure, our debt to gross book value and grew by 90 basis point, 46.9% get over here.
Yes, that's the adjusted EBITDA improved to 6.8 times for the quarter compared to 7.1 time since Q1 2019.
Our interest coverage ratio remained high at 4.2 times and we decreased our weighted average cost of debt by 20 basis point.
3.6% year over year.
These are important indicators in terms of hobby manage our debt and our ability to servicing.
For Q1, 2000 front do you see Energous AFFO payout ratio was 61 country person.
Leaving room in case, what temporary decline in April.
As a result of credit volatility in the financial markets you have suspended our dividend reinvestment plan in order to prevent dilution at current spot price.
Given payments are paid in cash flow all investors onto what the notice.
Given the uncertainties surrounding then talk the duration of corporate banking and then you have been drawn our guidance for 2000 couldn't be fiscal year.
We expect the cost related could manage the pandemic. We've continued to increase and solve these costs might not be covered based on the current government funding announcements.
Well, we monitor a business all patients have been talking about can actually result, and b. We continue to provide updates on an ongoing basis.
Did show the good dedicating more resources to managing the cotton prices, you're not considering new expansion projects or acquisitions at this time.
We've also limit capital expenditures to essentially maintenance capital.
Although it is impossible to determine the ultimate impact of corporate 19 at this point.
Connection robot, we'll find and buy them portfolio you about positions to navigate the current situation, but that's most would provide a closing remarks.
Most of you might know mute.
Excuse me the 60 operate im not showing Louis line connected at this time why do I can see point with <unk>.
So.
Managing Corbett Nike is extremely challenging and operationally intensive.
And will likely remain at the center of media attention and National debate for some time.
However, there will be opportunities that emerged as a result of innovation enhanced relationships with our stake holders and our ability to adopt new ways of working.
We expect these changes will long past the last long past this crisis.
Extend something pack of Cowen 19 on the company's operational and financial performance into coming quarters will depend on certain developments.
During the duration and spoke of dependent.
You expect covert Nike, we'll continue to impact our operations and acquired the use of Saudi precautions for an extended period of time under the new normal until the vaccine is developed and had been it stood.
And managing the crisis, while managing the crisis of a positive you have put our short control plants in the home.
We do remain optimistic about CNS future as a high quality provider of essential services to a rapidly growing demographic and we look forward to gradually reopening residences, while keeping I'd residency team members sake.
I'm incredibly grateful for our team who continue to demonstrate commitment and passion resilience and determined that received and outpouring of support and acquisition from residents families that each community if you so.
You won't get knowledge that many partners set up supporting us in the fight against Corbin My team and the Sip leadership, including the registered nurses Association of Ontario.
Public health units and regional onto to help teams that can you didn't military local health integration networks and the many hospitals.
But to support our team and our partners Seattle attempting to put our leadership team.
Hey leadership role in positioning the second for success and when they mark some besides a stronger company arbitrary upon for them.
Thank you for your participation of the call today I'm pleased to now answer any questions that you've now.
Thank you at this time, if he likes to ask a question. Please press Star then the number one on your telephone keypad again that is star wanted to ask a question at this time.
<unk> such as to moments the compound acuity roster.
And your first question comes from the line of Johansson Rodriguez with Raymond James.
Hi, Brad first like that.
Morning, first off I I, just wanted to commend your team.
Worth it your stuff you know close use right, where it is heroic so I can't imagine what must be like on a from lunch and those facilities.
So they all have my sincere reference.
Just turning over to the questions how much of the decline in their retirement residences.
In Q1 would you be attributed to cope with versus.
The oversupply issues that had had previously been didn't their prior to all this.
Actually I know you know to had Q1, usually is a part of the flu season before even the pandemic and out usually occupancy does not include significantly in the first quarter of the year out we saw some decline you know generally integrity.
We're in some essence business as usual I'll because it depends on a good not really gain spread but given the time. However March you know we believed that it had quite a bit of impact on our numbers because of corporate Nike and that impact was further you know what big hurting you and in April as well.
Okay. So maybe you know the 11% decline in same property NOI well, what do you know Davis I know, it's a tough question, but give us sense as to what that would've looked like.
At the end of February you know prior to feel pretty good schools. It.
Oh, Yeah, it's hard to do that because you know there somebody puts and takes you know quarter. You know in Q1. We also this was a leap year sort off you had additional around 200000 of expenses.
And this year, which we didn't happen last year. So that'll account for let's say a person or a bit for that I think it's hard to answer that question because you know.
To segregate them caucus corporate Nike works is not we can do it all makes sense inside but to do it from the sentiment cyto, oh, not being able to admit to you.
Residents I think it's pretty hard to do that at this time.
Fair enough. Okay, and then the lawsuit is is there anything there and.
Is it the same party you send lawyers the 2018 cases scenario relation there or maybe just more to chose.
Well I'll just story its long once I don't know, how but I got down I got kicked out of the call. So I apologize for that and thank you know.
Yes, we've just learned of the proposed class action are related to cope with 19 pandemic. We are reviewing it and we do expect it in due course through the appropriate court process, but well we won.
As you know we cannot otherwise comments on litigation.
Okay.
Back then.
Thank you.
Your next question comes Kinda, Linda Jonathan culture with TD Securities.
Thanks, Good morning.
Just just sticking on the retirement side.
I just want to confirm the occupancy was down 140 basis points March to April is that.
Am I reading that correctly.
That's correct Jonathan.
Okay, and what what would your.
Sort of moved Belk speed normally your turnover normally.
I think you know my on a on an average <unk> one sort of residential move out you know so when we look at our move in and move outs data.
For this quarter versus previous quarters, what we did see is actually a reduction in both of them.
Move ins, what lower obviously because people are limiting how people who can move in and the move outs also slowed especially during March and April.
The numbers are not meaningful Jonathan like if I could do what percentage of percent might show a bigger than worse is what the numbers might be and then you also had some.
People moving from.
Looking from sharpened good long term stays.
Okay do you saw the.
I assume you're going to see a decline in may two do you have a sense of how that is going to be versus April or is it too early to at all.
Yeah.
Occupancy sorry last question.
I would say its consistent I mean, we're not obviously able to move a lot of rather than an we are we are still moving in but it would be for a kind of essential services only because you know for seniors living alone through there a horrible experience it's been very very difficult. So.
You know, we have seniors that aren't aren't doing well at home living alone I'm trying to access you know get groceries and.
And medications and Karen services that they need. So we are we are admitting enforce central services.
Oh, it's sold out well and you know when adds it opens up hopefully in the coming.
Days and weeks that we'll be able to ensure same thing with the bad testing and be able to move people in seniors, who again are really I'm not doing while living and living alone through this experience.
So that May you know, we may start to see a slower increasing in admissions, but again, we would only do so.
To keep everybody see to give that testing and isolation protocols and so on.
With respect to move out again, they have slowed and primarily because no long term care home is admitting and so normally watch six is showing us is because.
You know a lot of.
Residence in retirement Huni carriage services at a certain point will move into a long term care and dot has dot has significantly slower Jonathan.
Okay.
And you talked a little bit about testing there.
I have all year long term care residence been did tested though.
Yeah were written more just in the process. The goal was as part of the action plan in Ontario, and I'm, just speaking for Ontario at right now.
Because beachy is a little different but there wasn't a mandate for advanced testing and it was to be completed by the Friday made the 50.
Oh resident in long term care and all team members in long term care would be tested by Friday, and then all rather than team members and.
Retirement, rather it wont be as well so that's well in process I believe that about 65.
Well as of yesterday know, what's happening rapidly, but about 70% to barbassa.
Residents as a team members of yesterday had been tested.
Okay on the long term care side right yeah.
Okay and that would are they going to do on like once I guess everybody's through the testing will they will they continued to do sort of ongoing testing of a employees.
Well, certainly dot dot dot something you know weren't we're working through it with government and the health authorities now or the public health or public health units.
Because this is really the way to keep keep coal but out of our home she says.
No team members, who may be symptomatic and that's really been a.
The main issue in terms about break to this point is you know asymptomatic team members that I'll pass the screening and don't don't realize that they have that so this is really really a very important to you ought to have advanced catching.
Widespread testing of team members on a regular basis with a with a quick quick turnaround time, because our goal also with to get a team members back to work.
But her off.
Okay, but that is something that governments looking to do.
Oh, yeah yeah.
Yes, it's very very important.
The prevention of spread.
Okay. Thanks, all that I'll turn it back.
Your next question comes from the line of Pamina with RBC capital markets.
Thanks, and good morning, Justin you know I realize it is still or what are your internal assumptions on when you may be able to start opening access for resident tours.
In the return on portfolio and perhaps non essential type movements.
Well I think that's a b C pammi and our experience NBC is that there is there we have had thankfully.
No active cases or in staff were in and team members Orin resident.
And there I mean, I think the whole the spirit I know the resins are getting very anxious to get out and to a.
Visitors and so on thought we anticipate there it will probably be first Ah were already planning you know to.
A resident dining and you know focusing on the resident experience a number of things that we could do there.
But I think it'll be NBC first and as I said, we are moving residents and now, but it's really those you know who for essential.
Central Karen services, we do anticipate over the coming months that we will be moving in resident certainly NBC, but again, our priority here is to keep coal, but out of our homes and residences. So we would only do what with certain protocols around testing and so wanted to ensure that everyone.
No it's safe.
Got it.
Just a in terms of the additional.
Related costs in long term care.
The expectation and most of those costs.
Will be covered by government funding other than perhaps maybe timing differences or you know is there a possibility that some production just slipped through over the course here.
It's probably it's hard to tell Tammy I think you know government have been extremely supportive in every way including.
You know provincial directives access to P. P E a guidance and so on a very collaborative so that that's been extraordinarily helpful. It's hard to say I mean, there. There's just so many expenses here the they're definitely won't be timing.
Finding considerations and you know and of course.
Hopefully the majority arb and kind of an unknown at this time I don't know net and do you want to.
Yeah, I would just I would actually got.
Well, no, especially Ontario, NBC public had been very supportive and covering.
Some of the cost Oh, we do expect they would be some timing challenge and pammi, they could be some cost, which I'm not covered as well.
And again as we have further visibility on it and we will come to provide disclosure over time.
Got it and then just in terms of the.
Can you maybe expand on how you're working to address that I know you made some comments, but maybe and also what didn't talk that might have over the balance of the year on retirement Hum the retirement segment.
Oh, well with respect to staffing.
As we said that the challenge was you know even before.
Before the pound that make it was you know watching probably staffing challenges across the board across the sector.
What we've really been focused on is moving.
Part time for full time, so we've had good success with that we're very pleased that a number of team members have chosen to go from part plentiful fine.
The other is returning to work as of.
Today, you know we've got a number of our team members who are all I think we have about 170.
But we also have a number that have no team members have now been resolved so as that happens, we hope to get more and more team members back to work as well as weekend, where recruiting so we've recruited a many many many workers and we've also introduced a new work.
All which is a care support assistant Raul.
Which has been a very helpful. So we're bringing on a lot of new people and providing the education orientation and there were a real real support to the team and to to residents.
Yeah, I think where voters 71 team members that have been resolved to data. So we hope to continue on that.
Not thing.
Debt people back to work.
Thanks, that's helpful noise, maybe just one last one coming back to the.
Those class action can you remind us.
You know going back.
Lisa.
That's it ultimately gone discontinued but are these lawsuits typically covered under your insurance coverage.
Well.
First I guess just first of all as you know operating in this sector doesn't entail a certain amount of liability and led to gauge your risk just because of the nature of what we do.
But all of our policies continue to be enough in of and the fact, including resonant care.
So we have elsewhere as far as we know these also include anything related to pandemic.
So like we're not aware of any exclusions farmer our policies.
Got it thanks very much.
Your next question comes from the line I'm trying to clean with BMO capital markets.
Good morning.
Louis You mentioned that you know somebody be LTC properties were particularly hard hit.
Was there any correlation between a if it was a newer home bird older hold that was going to be redeveloped that led to a bigger outbreak.
Yeah. So is there a theme there yeah, you definitely though that's in let's see homes.
And so these are as you know the older homes 40, 50 years old for bad wards really small congested spaces.
You know one averages about 300 square feet per resident compared to about 600 square feet per resident in a new a class all.
So very difficult and won the the virus gets yeah and in every case. It has come in you know with.
Remember who was a symptomatic when we've done the tracing.
You know, it's very difficult because there's a you know unfortunately residents and for bad boards are rooms.
And it's really difficult to put the isolation protocols in place where your isolating residence Inn wants you know you have a cold, but positive and you're waiting for test results and so on it.
Difficult to start moving residents around and potentially exposing a unnecessarily and so on so it becomes very complicated in.
In a C class home. So I think that's definitely been the experience to date, a if you look at it does that.
It is worse and harder to contained in the C class property.
And I know this is early into this but you know is the industry calling for maybe.
A quicker adoption of the capital renewal program or more funding to kind of accelerate that program or is it just kind of weak. This is overblown, but before that decided.
Yeah, well I think that'll come I mean, right now and were really we're focused on managing this situation and containing containing it we do as I said, we have a number that had been particularly hard hit two of which are see Clos.
Homes, So were really I think the sectors really focused right now on doing everything we can to do the right things to manage the a pandemic.
And be able to manage then looking out further so that will come.
As well I'm sure other policy changes and so on which you know we would we would welcome to participate in those discussions and to be a part though.
[noise] and then on the policy, where you can only work in one I'm home or residents is that likely to be permanent. After all this is over and and does that have any implication for you know kind of the wage structure for the industry.
Well it may and it's not a bad thing I mean.
The challenge of logistically doing not because we do need part time workers just by virtue of having a 24 seven business because you need workers on nights and weekends and.
To cover off so.
That's that's why it is what it is why we do have on number part time workers that it's important that we have that flexibility and it's also you know kind of structural around how the scheduling and collective agreements go.
But in terms of if it did I think we do want more full time workers and dot.
That's one way to do it.
But the other is that <unk> remember, we're all pretty much unionized, particularly in long term care, it's the collective.
Bargaining kind of has the wages establish so we're not sure where that will go but the main with the temporary pandemic pay releasing the has been putting on both provinces is extraordinarily helpful and recognizing the work that off the frontline workers are doing you know in and every sector that but we have a central.
Workers.
Thank you that's very good color I'll turn it back.
Your next question comes from the line up Yashi thing Paul.
A recent bank.
Funny.
Oh gosh.
Hi.
Just a one to understand.
Why would be she has not seen any cases sources, so on to heal which I see many cases in qubec.
You guys are been able to school, but is that to a particular factor.
I think it's it's difficult to say Yashin mean that the nature of the virus is changing whether one as as we know it's it definitely has a higher prevalence in densely populated areas like the the G T a.
A lot of our property just being she are not like during an interior and areas that aren't as densely populated so that may be one climate, maybe another one as well as you know the precautions.
That have been put in place I wouldn't say have been really any different than the what's been done in Ontario, We put the same precautions in place and all of our residences across the country. So.
It's I'm not sure that dot has one other than its probably because it is community spreads.
I think that's just the problems have been lower NBC.
Okay.
And you are all the time and whole margins. Despite the occupancy decline had been holding quite nicely.
And just want to understand.
I don't think is happening, but there's any goldman shapell for those expenses, helping those margins.
No I mean.
Any any support for.
It's it's really a flow through it just goes to support costs. You know expenses that you incur as you incur them yet do you want to add to that yes, I mean, there's no change you know our.
Full year margin for last year for the time goes on 44.7. So we did go Dol hasn't reflected an occupancy and we talked about how started adjusting expenses because we want to doing showed that as a company go to ready if there was a surge capacity from hospitals, which did not happen. So.
We we do see a decline in Marquis and you don't there's no government help which will cover on expenses. There's some couple I'm gonna help more from a corporate related expenses.
Which is not material for CN up would would cover you know expenses such as PPD. In addition, a screening for the Cardinals.
Okay.
And just wanted to understand Oh.
The disciplines that government is providing to your stuff you know.
Various initiatives.
Okay.
Does that amount pull to a piano coal or is it a separate thing.
Yeah for wages up again, you know we are getting a little before the details provided on it but you know if they do flow. It would be similar to you know long term care, where there's revenue and expenses that match, but again, we are waiting for the information on it from one period.
Okay. That's it for me thank you.
Thank you.
Your next question comes in a line of Tom.
National Bank.
Hi, good morning.
Hello.
I told you can hear good morning.
Perfect Sorry, I guess, one of the question going the opposite.
During the outbreaks themselves.
Huh.
<unk> barrel burning curve.
For you operationally on this earth, each kind of situation there correct.
Yes, well there there definitely is I think there's there's definitely a learning curve for everyone. As you can see across the country. You know I think governments and everyone are working collaboratively to understand the nature of the virus and how it spreads and and what precautions. Our most helpful. So I would say it it's learning for everyone and.
That's why the situation evolves.
So rapidly, but we have certainly learned around you know to Troys question about FC home and I know how it spread.
And what to do so there's that there's a lot of lessons learned here that we would I think applied to for the future because there's this there may be future spreads you know I'm, a resurgence and in the fall or in the coming month. So.
We're all focused on managing this one and then really already starting to apply lessons learned in each case since we.
As as new new cases pop up or as another outbreak occurs that we're learning from every day around how to manage the situation.
So you are finding that at least like versus outbreak one versus.
They like the response is getting a little Smith either for you guys operational.
Well I think you know just because our most severe a great Iran homes that you know where it occurred over 35 days ago. So late March early April I think and that's I think they experience. If you look out where the most severe cases are it's those.
That happened earlier on certainly in Ontario and NBC.
Before somebody additional precautions were put in place like Universal masking and broad broader testing and some of these other things that we're now doing what you which are very helpful.
Okay, [laughter] given that we're a little bit.
And the government has gotten off.
Offering up additional funding.
My sense of how long like that the 240 million, but the government's put put up how how long does that fall and give an idea of how long that funds the incremental costs you guys would be facing.
And maybe when you know the industry and whatever it might have to have another conversation around.
Cost.
Well I think it's too early to tell it once we said it depending on the severity of the likes of time. This goes on with this intensity.
You know and and the nature of the outbreak dots it will depend but what I think.
What's been committed is it's very helpful and we'll just have to work through you know we learn more everyday around what what the expense is.
So that will.
Come out in due course, and there will be timing issues are certainly.
Okay, and then lastly, the Ontario, Mr Watch for care.
So that came out and so but yes, there is going to be you know that going to be right now, but there certainly will be a review how.
You know the system is casinos stands of constructed going forward.
What are you anticipating are gonna be.
You know the primary.
What should we be thinking about as some of the big issues that you will need to get tackled in that.
Well I think there will be a number of things that the capacity.
That's capacity in the system.
Naturally stopping level.
No I'm not long term care has always been set up as is the place for you know to make at home like four for residents. So just by virtue of the nature of what we do.
They're not set up long term care homes or lock set up like hospitals with you know extensive.
Infection prevention and control and all of this thing does cleaning protocols to the extent that you would end up.
Know operating theatres are somewhere you know it we're just not set up like like hospitals by virtue of the nature of the business then of the services that we provide to residents. It is much more home like including their own furniture and so on so there will be a number of things, including the capacity and Ah you know this to see homes and there's.
The number of thing, but we would certainly welcome.
Welcome to review and would have we've learnt a lot that we would welcome participation or not.
Okay. Thanks, very much guys.
Thank you.
And again, if he wants to ask a question. Please press star one.
Your next question comes from the line a friend in April with Canaccord Genuity.
Hi, Good morning, maybe just following up on tells question.
If we're looking to the feature of the industry, what I guess structural or permanent changes.
You envisioned to the operating model I know you know other sectors are adopting to a more physical distancing measures. You know, it's an airline now looking to middle seed or restaurant opening at reduced capacity things like that I'm. Just wondering you know what I guess.
Changes to the operating model in the future you see becoming a little bit more permanent.
I think it's difficult right now this is what you know we're learning now, but first sure. It it's going to require broad scale ongoing testing.
For team members and families as they are good because we do want families to be coming backend and volunteers and improve the resident quality of life, it's been extraordinarily difficult for.
Resonance in isolation for so many days a week.
So we do want Zachi, you know families to be able to get back yet so it's going to require broad broad testing as well as.
Significant access to P.P.E. and training just on infection prevention protocols for for everyone, who would be coming into.
And as those restrictions open up a bit on visitors.
Okay, but I guess, maybe longer term do you see.
Like whether its capacity reduction thing and capacity or number of residence in a in a home or a increased stopping to.
Resident ratios like.
Cannot become the I think any range and though how did that impact margin.
Any range of those things are or are possible and I think it's just too early to tell where that's where that will go thank everybody.
As I said are really focused on the current crisis and getting through this and managing the residents care. That's the real priority is keeping our resident safe, giving them the care that they need and managing the social isolation and protecting team members. So that's really the focus right now and that will come in and do.
Time is what are you know other changes in the future to such decide to suffer success then.
To be able to provide the essential services that we do.
Great. Okay. That's that's great I'll turn it over things.
Thank you.
Your next question comes from Atlanta, Chris Cruelty Cie DC.
Hi, good morning.
Very quick one from me.
Clarification from Jonathan's earlier question with respect to aprils same property occupancy.
In terms of the month over month change is it the 85.1, which is the average for the quarter or the 84.5, which is the out of that same property for a full quarter Ana.
So why don't they give you some numbers this level. So there's no confusion so end of Q on our average same property occupancy was 85.1, an equal averages 82.7 and for Q1. The averages 84.0, sorry as that is 84.5 and as that as of April.
These people in three so jonathan's question was off if I understood correctly was 140 basis point decline in average and we saw that hundred 40 basis when declined in average and down 120.
<unk> hundred 20 basis declined in adds up.
Got it thanks, and then I think you alluded to earlier that well, we're having fewer movie fans were also having fewer move outs to long term care just want to get a sense. If it is there a kind of a pent up move out situation or is.
The idea or do you think that once long term care is accepting people again. These people will generally try and stay [laughter] stay a stay in the residents stay in your residents for longer than normal.
Yeah, we would certainly encourage them to stay is as long as we're able to provide the level of care. There maybe some that really do need a long term care I think you know the lesson learned is that there might be residents at where maybe moving out of them.
You know have done okay living in a retirement residents for a longer period of time so.
Well be wanted that the takeaways we hope.
But there will be residents for sure that do need more carriage services and well well move out are there may be residents right now in a hospital that may not be able to move back into a retirement home depending on what their needs are.
Thanks very much.
Your next question comes on line of human She's got social Bank.
Thank you and good morning.
On on balance sheet to were $2 million Oh debenture maturing early next year I.
I know there sometime this year, but what are your toward Sean unsecure debt market.
And also had the mortgage spreads move further damage that though.
He wanted to go into people to go on sentiment.
Sure Hi, good morning launches so you know the.
The unsecured market.
You know is quite volatile pilot in this you know during this time there had been some and we have which have been able to access the market.
The spread could be anywhere from 300 400 basis points at any given time, so I think it's hard to predict that.
From a C amidst the financing perspective, you on the process itself.
I'll financing couple of our properties that you see mid C eligible those spreads have been the overall staple so there's not a not a lot of change there.
Your first question what about series B, it's coming due next year, we did by 30 million off at some time box, we've reduced the amount which is outstanding.
And given our current liquidity, our focus and adding more as we are finding additional properties.
Access to see amidst the financing access to a mortgage market. We do believe at this time that you'll have quite a few options to be able to refinance it when it comes to you.
Sure Thanks to them and it just a follow up on occupancy what wasn't supposed to did decline in new move ins them until April and May be me so far.
Sounds like you're still moving resident on emergency or since you basis.
Yes, just maybe from an average perspective again I'm going to Jonathan I had a similar question I think the numbers up you know on and.
End of March and April some more wins have been very specific cases, and only the homes, which were not in any outbreak I think it's hard to make friends just using one month number.
You know so the numbers were lower than previously, but I think it remains to be seen how that impacts so so going forward.
Okay. Thank you. Thank you so much on some of that thank you.
And with that I'll turn the call that's a mismatch color Matt.
Oh. Thank you then data.
Thank you all for joining a strict morning, we really do appreciate your ongoing support is a difficult time off for everyone for for businesses and certainly for this sector.
Really want to thank all of you for doing your part to keep yourself your loved ones and for our keeping society say.
So ah thank you and out we'll look forward to our next call on hopefully things will be.
Be better at that time with respect to the south pandemic situation. So thank you have a good day.
Ladies and gentlemen, thank you for joining US today. This concludes today's conference you may now disconnect at this time.
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